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EU must stamp out service sector protectionism: auditor

Monday, March 14, 2016 - 22:51

[BRUSSELS] The European Commission must do more to penalise member states that fail to open up their services markets to EU competitors, auditors said on Monday, in a report that echoed British complaints about the European Union's failings.

"The European Commission is not looking after the interests of Europe's consumers or service providers as well as it should," said Neven Mates, the member of the European Court of Auditors (ECA) responsible for the report.

Though initiated earlier, the report's publication coincides with Britain's referendum campaign on whether it should stay in the EU or leave. The vote will be held on June 23 and opinion polls suggest the result could be very tight.

British critics say the EU has failed to open up markets in services, where Britain is an important exporter, as much as it has for manufacturing, in which the country is a net importer.

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The EU adopted rules a decade ago to create a common market in services ranging from tourism to accounting, but they are still only partially applied, raising concerns more widely across the 28-nation bloc about constraints on economic growth.

Examples of national barriers erected by member states to stifle foreign competition abound. They include technical and administrative hurdles to trading in certain countries and also explicit discrimination against foreign firms or consumers.

The ECA report mentions, among many, the case of a German tourist who, while on holiday in an Austrian ski resort, discovered that the purchase price of tickets for lifts was much more expensive for foreigners than for Austrian residents.

The European Commission has the power to start disciplinary procedures against states that do not apply common laws. States can be taken to the EU court and suffer financial penalties.

The auditors said the EU executive made too little use of this power.

They also said the Commission was reluctant to pursue legal proceedings due to the length of time they took - an argument the Commission rejected in a statement included in the ECA report.